SpaceX IPO Value Hinges on Space Tech, Not AI Hype, Says Portfolio Manager

SpaceX's impending stock market debut is generating significant attention, but its true value may lie more in its spacefaring capabilities than its artificial intelligence ambitions, according to Mikko Linnanvuori, a portfolio manager at S-Pankki. Speaking on the HS Visio podcast, Linnanvuori suggested that the company's primary competitive edge stems from its capacity to reduce the cost of launching payloads into orbit.

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SpaceX's genuine competitive advantage is related to the fact that they can now take things into space cheaper than others.

Linnanvuori described the collection of business activities being brought to the public market by SpaceX as "quite a collection." While acknowledging the company's ventures into AI, including potential future AI servers in space and its involvement with the xAI venture, he characterized these as applications built upon its core space technology. "AI is just one application case on top of this space technology," he stated, implying that the current AI fervor provided a convenient narrative for the IPO.

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And then this artificial intelligence is that now we are talking about taking AI servers there in the future, and now they have these AI things on the ground with this xAI company acquisition.

He further elaborated that if a different technological trend had been prominent, SpaceX might have focused its public offering narrative on that instead. "If we had some other enthusiasm, then perhaps another application area would have been found to build this listing story around," Linnanvuori explained. He emphasized that his focus remains on the space technology aspect, with AI being a coincidental, albeit significant, area of interest.

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So it's a bit like they just got lucky that we have this big AI hype going on now.

The discussion took place as trading for SpaceX shares was set to begin on June 12. The podcast episode, which featured an interview with Linnanvuori, was recorded on the morning of Friday, June 12, and later edited for clarity. The conversation delved into the economic and technological implications of major IPOs, particularly within the tech sector, which has experienced volatility.

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But if we had had some other enthusiasm, then perhaps another application area would have been found to build this listing story around.